This is a sort of free coaching calculator for business owners to get the most bang for their buck. It can save you thousands of dollars!
A lot of people are curious about Business Coaching. There is plenty of information you can get online about the field itself. But the one thing that is hard to find is what someone may recommend as a sensible amount to budget so you don’t rip yourself off, along with other really important criteria. How do we make the best buying decision possible when it comes to onboarding an outside professional like a coach? It can be scary. I’ve made mistakes in this arena, ones that I don’t want you to make either. So, that’s what we’ll be talking about here!
Below is a preview of five tips to help you make the smartest hiring decision ever.
1. Do you even need a coach?
2. Which coach is best for you at this time?
3. How much should you spend on a coach?
4. Do you get a bigger return the more you invest?
5. What are some good guidelines to follow when it comes to spending on a business coach?
Here is a scenario you may be familiar with. You’ve been running your practice for a few years now. You’ve had some pretty good highs. You’ve also had some pretty bad lows. It can swing from too busy to not busy enough. In any case, it would be nice to have a sense of consistency and overall increased revenue.
You’re not a total rookie — You know at some point it would be nice to hire a business coach, to put more money into yourself. But how much and is now that time? Seems like it would make sense to make more money first and then hire a coach? Or does it?
What about people you know or have heard of that got a coach and didn’t love the experience? You would hate to be one of them. That would be an awful mistake, emotionally and financially.
So, now what?
I have intimate knowledge of and belief in the benefits of DIY ethos. The truth is, there is a lot you can learn entirely on your own. This is the Information Age after all. As a Business Coach, I like when a potential client has already put a lot of effort in, both personally and professionally. Whatever your success rate for having done so, win or lose, it is a clear demonstration of your work ethic. Someone who shows up and says, “I’ve tried everything,” is usually more informed and more self-aware. They know more clearly what’s possible, and they also possess an honesty and humility about their current ability and where their deficits are.
Conversely, someone who has spent a lot of time mostly sitting, perhaps overthinking, might not know exactly what kind of help they need. So, they remain throwing “spaghetti at the wall.” Part of this haphazard strategy may include blitzing marketing or business development professionals for help when they may not actually be ready to allow themselves to accept such help. Personally, as a service provider, I don’t want any part of the messiness that is slapping pasta across the room into kitchen tiles.
A qualified Business Coach will help you save a ton of time and, of course, make a heap of cash.
So, do you really need a coach? I believe the answer is a firm YES. A qualified Business Coach will help you save a ton of time and, of course, also help you make a heap of cash. But you’re not going to know that you need a coach until you’ve actually tried to rack up some good successes and failures on your own. That means getting out there and putting in work. When you realize both the advantages and the limitations of cheap and free advice, you’ll be more committed and prepared to go to the next level with the guidance of a solid Business Coach that can help you develop a highly focused and cohesive plan, not just a hodge podge of Internet tips and tricks.
Not every coach is the same. Generally speaking, among “Business Coaches,” there is a wide spectrum between those who provide more life coaching and those who focus more on actual marketing & sales. They are absolutely connected but so totally different at the same time. I’ve already talked about this at length in a few other posts, so I’ll only summarize here and say: Be clear about what’s holding you back. Is it more your lack of confidence or your lack of specific knowledge? Probably some combination of both. But which seems more dire? Start there and interview and hire accordingly.
Please don’t hire a 20-something year old Business Coach. That doesn’t and shouldn’t exist.
Quick note: Please don’t hire a 20-something year old Business Coach. That doesn’t and shouldn’t exist. More of that explained in the links below.
High-value supplementary information:
Visit both of these articles!
Ah… Money! The one question so many people seek to avoid, both buyers and providers! No one wants to talk about it. A lot of people will deflect with “Well, it depends…” But it is something that is on everyone’s mind so I’m going to step out of that uncomfortable silence to take a stab at giving you some useful guidelines.
Using my own history as a buyer of coaching services, what seems reasonable to invest? If you are at the beginning of your entrepreneurial journey, I believe one could commit up to $6,000 for up to 12 months of support for a legit and proven mentor. Given the marketplace, this is a fair starting budget to partner with the right professional. That does not mean you have to spend $6,000. However, give yourself that amount to work with. If it doesn’t pan out, at least you’ll know you gave it a bona fide fighting chance rather than attempting a great feat with a pretty significant self-imposed restriction right from the start.
Why? What’s the logic there? First of all, a lot of people have spent waaay more than that on traditional education and have gotten far less back in return. Compared to this most popular method of getting ahead in America, the range I’m suggesting here is a drop in the bucket. Secondly, ask yourself if you plan for your business to make $6,000 next year. I’m hoping you didn’t just say, “Yes,” but that you said with fire and emotion, “Yes, duh!” In fact, your business has to make a heck of a lot more than $6,000 to feed both itself and you, not to mention any other dependents you may have.
Still, some people may nervously answer, “I don’t know,” or, “No.” That’s totally fine. Better to be truthful about it. If you’re in this camp, please don’t hate me but there’s a very strong possibility you have a hobby or a fun side gig, and not a proper business. There’s nothing wrong with that. I have hobbies too. In fact, I was part-time in my own business for a couple years before I went all out.
Generally, you pay to participate in a hobby, whereas a business pays you! So, who is supporting whom?
Here’s the difference if you’re still wondering what’s what… Generally, you pay to participate in a hobby, whereas a business pays you! So, who is supporting whom?
If you are a hobbyist, by all means, enjoy yourself. Why hire a coach? I probably wouldn’t – and I am a coach! Keep doing what you’re doing and have fun! On the other hand, if you’re a Business Owner that is ready to uplevel, or you really need your fun side gig to grow into a legit money maker (which was the case with me), meaning you are dedicated to earning more revenue and working with more awesome clients, then consider the following.
Again, using myself as a model (and also risking my vulnerability in this kind of transparency), I was eventually able to make $60,000 from my own $6,000 investment in new practical skills and knowledge. You tell me, is that “worth” it? What would it mean to you to have that level of startup success as an up-and-coming self-employed professional? To finally go full-time and have the full-time pay to show for it? I would think not bad, not bad at all.
Mentioned above is how I made one of the best investment decisions ever. But it hasn’t all been cake. I’ve made some horrible errors too! I often like to think I’m making these mistakes on your behalf so you don’t have to make them yourself. So, pay close attention.
If my initial investment came back times ten, doesn’t it reason that the more I invest in coaching services, the more I’ll make back? Whatever that number is times ten? After all, you get what you pay for, right? Isn’t bigger better?
It hasn’t all been cake. I’ve made some horrible errors too!
I would think so given my original experience. However, the answer: WRONG!!! Amateur error on my part. This screw-up really set me back big time (both emotionally and financially) when I put even more money back into another coaching program. Not only did I not make my money back times ten, I didn’t even break even. And that was especially hurtful because, in hindsight, I should have been smarter. It felt more like a gamble than a logical step forward. That I made a mistake was one thing (everyone does that), but that it was especially costly was terribly painful.
Again, this is all in service of you. So, I really hope you appreciate it. Take notes! The initial money you spend to launch should be perceived as rocket fuel: Burn a lot at the start to break atmo, then coast and play more conservatively.
Once more, using $60K in revenue to represent a healthy beginning to making a viable practice, it is my opinion that the formula for the amount spent on future business coaching would modify. After you are up and running, you would not keep spending in $6K increments. You would adjust your investment cap to 10% of total revenue. So after making $60K, you would still only spend a max of $6K annually on Business Coaching. When you get to $90K, you earn a new max of $9K annually, and so on. There is A LOT you can get done with that kind of budget.
Burn a lot at the start to break atmo, then coast and play more conservatively.
Still, beyond a certain point, even that 10% which is meant to be a protective boundary may balloon past what is financially reasonable. For example, at one million dollars in revenue, you will probably have more staff, expenses, and taxes. Does it make sense to pay a coach or consultant $100,000 on top of all that? I’m thinking no.
Before getting to that revenue level, you’ll want to have started decreasing the percentage you plan on putting toward coaching. In fact, you probably will have moved away entirely from this very general guideline of coaching to revenue ratio. More realistically, you will have arrived at an entirely new calculation with your CFO given the balance of figures between operations, salaries, profit, etc.
Let’s summarize what’s been described here…
So, there it is! Now, think about it. Where are you on this scale? Hobbyist, part-timer, pre-launch, entry-level, business adolescence, business maturity, business veteran?
Locate yourself on the timeline and make moves accordingly.
I would like to hear your different viewpoints. What has been your experience in hiring a coach? And what additional advice would you include for those wondering about hiring a coach?
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